The Independent Communications Authority of South Africa
“has decided to engage in a reconsideration of the termination
rates applicable for the years beginning 1 April 2015 and 1
April 2016,” it said in a March 12 response to objections by
the country’s two largest carriers, a copy of which was seen by
Bloomberg News. The review will take six months, it said.

The regulator ordered to lower mobile termination rates by
50 percent to 20 cents ($0.02) per minute from April 1, with
further cuts to 15 cents starting April 2015 and 10 cents a year
later. The reductions are intended to help smaller carriers
including closely held Cell C Pty Ltd. and Telkom SA SOC Ltd. (TKG),
the fixed-line phone company that’s 40 percent controlled by
South Africa’s government.

In an e-mailed statement, ICASA confirmed the affidavit and
its content, adding that the review is being done with the help
of an external economist.

“The matter is going to court next week and all
clarification will be made then,” it said.

Jobs Threatened

Lower revenue from mobile termination would mean MTN and
Vodacom receiving less from smaller competitors, putting
pressure on the companies to cut costs. Vodacom’s mobile
interconnection revenue decreased 24 percent to 1.9 billion rand
($173 million) in the six months through September, while MTN’s
fell by 25 percent in South Africa.

Vodacom, a unit of Vodafone Group Plc (VOD), joined MTN, Africa’s
largest wireless operator, in taking legal action against the
regulator over how it put together the plans to reduce
termination rates. The phone companies, both based in
Johannesburg, control about 80 percent of the market, according
to BPI Capital Africa analyst Kate Turner-Smith.

A Vodacom official declined to comment on the legal
process. An MTN representative wasn’t immediately available for
comment.